A 60-second read by Anthony Benante: The US Stock market is experiencing something that historically happens about once per year, a market correction.
Our Clients’ Perspective is Important to Us
Our client portfolios are constructed in a risk-appropriate strategy, based on ability and willingness. When clients complete a financial-planning workbook, we are able to present analysis showing their financial position in different market environments, including markets like we are currently experiencing.
Starting January 30th, market volatility has significantly increased. Explaining the exact reasons for the current moves at this point is difficult. Fundamentally, not much has changed from an economic growth, corporate profit or employment standpoint. These are all showing stability and improvement. However, on Friday, as part of the unemployment report, it indicated that wage inflation is starting to surface. This created some questions and concerns around inflation and interest rates. Markets responded aggressively to these concerns. We have seen popular equity benchmarks trade significantly lower than where they were in mid-to-late January.
Though the numerical–point moves you hear about may sound alarming, keep in mind that the index levels themselves are higher. In reality, the percentage moves are not that uncharacteristic. As investors, you should expect to experience periods of market weakness. Corrections of 5% – 10% are not that uncommon historically. We just have not seen these types of moves recently.
What Baron is Doing – Controlling the Controllable
The development of Baron Strategies for clients considers different market environments. That is why we have assets that are built for Growth, for Stability and for Diversification. We are paying attention to the performance of our investment choices. We continue to review our investment choices versus peers and benchmarks, and seek rebalancing opportunities.
Baron follows the four pillars of disciplined investing:
- Create a globally-diversified portfolio
- Control the quality of investments
- Rebalance when needed
- Keep emotions out of investing
With the recent Stock Market turbulence, there are THREE questions you should be asking yourself:
- Do I have a strategy in place for all market conditions?
- Am I receiving proactive communication from my advisor?
- Have I been given financial guidance to help answer “Am I OK”?
We gladly offer a second-opinion phone call to help review your financial situation or to answer any questions you may be having at this time. Please feel free to reach out to the Baron Team.
Disclosure: Past performance is no guarantee of future results. Every investment strategy has the potential for profit or loss. This material is not intended to be relied upon as a forecast, research or investment advice.